APD: "It's the Final Final Countdown", Some Thoughts on Darrow Dynamics into the FID

Research evidence excerpt

APD: "It's the Final Final Countdown", Some Thoughts on Darrow Dynamics into the FID

June 15, 2026

Investment Conclusion

As of 6/12, APD shrs are up +14.0% YTD, underperforming the WR Industrial Gas Index (+18.4%) and the XLB

(+15.1%), but outperforming the S&P 500 (+8.6%). APD is trading at 14.1x consensus FY27 EBITDA, slightly above its

5-year median of 13.8x forward EV/EBITDA but below the WR Industrial Gas Index's 14.8x '27 EV/EBITDA valuation

(roughly in-line w/ historical averages).

We expect concerns on the APD thesis to gradually abate re: (i.) potential for large project cost overruns and/or lack of

partnerships / off-takers (further NEOM start-up updates, final Darrow decision by mid-CY26), (ii.) fewer challenging

"problematic project" updates (vs. low expectations), (iii.) improving He S/D dynamics - Qatari production offline for 2+

months / damage to Helium2 (~5% of global supply), potential electronics demand inflection, Russian export controls,

and (iv.) stabilizing macro trends (better H2 demand, etc.).

We respect that project delays have been weighing heavily on investor perceptions, but it's our sense that co

messaging re: final timelines / offtakers will help to re-establish credibility. As investors continue to methodically

embrace the thesis that the majority of "bad news" is already embedded in shrs, it's our view the path of least

resistance is to the upside for both #s and valuation over the intermediate term. However, we full expect APD's

narrative to remain relatively complex vs. LIN.

Over the LT APD's valuation should steadily rise to the higher-end of its historical range due to the: (i.) steady

recoveries within core industrial gas businesses (focusing on US and/or EMEA), (ii.) stabilizing perceptions re: blue H2